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The headquarters of JC’s 5 Star Outlet is tucked away in an unassuming office park just south of
Port Columbus.

The closeout retailer, however, hopes to make big things happen a few miles away at the very
visible store that once housed the JCPenney Outlet Store.

“We believe the outlet-store business has huge potential for continued growth,” said Glen
Gammons, president and CEO, during an interview in his new office.

JC’s 5 Star Outlet is the successor, in a way, to the JCPenney Outlet Store. SB Capital Group, a
company affiliated with the Schottenstein retail name, acquired the outlet stores in October 2011
and created JC’s 5 Star Outlet to tap their potential. Gammons, who had led the JCPenney outlet
enterprise, was brought on to lead the new company.

But in important ways, the JC’s chain and its offerings are different. Before, the Penney’s
outlet stores offered unsold items from the chain’s stores. Now, while J.C. Penney Co. items are
still available, merchandise from many other sources also can be found at the JC’s stores, a chain
that includes the Far East Side location on Scarborough Boulevard and others scattered across the
country, from Georgia to California.

“We’ve made some changes in our assortment,” Gammons said. “They’re more interesting,
one-of-a-kind — everything from strollers to generators.

“I think everybody today is interested in how to stretch their dollar on everything, from ties
to tennis shoes,” he said. Because of that, “outlet stores and low-end retailing have produced most
of the sales gains in the past five years. Even luxury retailers Nordstrom and Neiman Marcus have
seen sales growth in their outlet stores versus their core business.”

Since the purchase, Gammons and company have been working to revive, reinvigorate and — most
recently — reboot the operation, for example, by separating the electronic cash-register system
from J.C. Penney’s. Part of that work involved building new systems for JC’s 5 Star Outlet partner
SBC Logistics, which Gammons also heads and is based in a nearby 400,000-square-foot warehouse.

“It’s a good business today, but 20, 30 years ago, this kind of business didn’t exist. A
retailer would just cut (unsold merchandise) up and throw it away.” Business is so good that, since
SBC Logistics was created in May 2011, it has added 100 jobs in Columbus, he said.

Observers are optimistic about the potential for the new retail chain.

“The store is in much better hands,” said retail analyst Chris Boring, principal at Boulevard
Strategies. “When it was part of J.C. Penney, it had become an afterthought. This management team
has made the outlet stores their total focus, and they have a lot of experience in retail
liquidation, which is a much different type of retailing than regular department-store
retailing.

“The fact they’re not wedded to J.C. Penney frees them up to go for other sources of
merchandise,” Boring said. “All in all, it’s a win-win.”

The biggest adjustment, however, remains to be made in the minds of old customers.

“A lot of what they need to do is remind people that they’re still open,” Boring said. “Many
people thought it had closed,” a situation made worse locally because of the struggles in the
nearby Brice Road retail corridor.

The company estimates that as many as 10 percent of old customers still think the store is
closed, Gammons said.

To combat that misperception, the company has made some adjustments in its marketing — emailing
longtime customers and buying advertisements to promote the new name.

One challenge that is outside of Gammons’ control is the future of former parent company J.C.
Penney.

Missteps in marketing seem to have kept many customers away, he said.

“I was shopping for a Keurig coffee maker recently, and Macy’s had it discounted to $129 from
$159; but Penney’s had it for $119. When you’re paying for an item of equivalent value, Penney’s
had the best price — but didn’t get credit for it.”

J.C. Penney’s future aside, JC’s 5 Star Outlet is charting its own course, and that’s one of
modest growth.

Gammons expects to expand the chain by one or two locations a year starting in 2014. At 30,000
square feet, the new locations will be on the small side, at least in comparison with the Columbus
store, which remains the biggest in the chain at more than 100,000 square feet.

The new stores are likely to be located in or near strip shopping centers rather than far out in
empty fields — or at outlet centers.

“Outlet malls have been hits or misses — and many are not really outlets, they’re facades. We do
have four stores in outlet malls — Fort Lauderdale; Dallas; Ontario, Calif.; Tempe, Ariz. But what
you’re getting today at a lot of the outlet malls is only 25 or 30 percent off. I call that a sale
at a department store. That’s not the 70 or 80 percent off you expect from an outlet.”

And that is definitely not the kind of discount that JC’s 5 Star Outlet offers, he said.